Healthcare logistics: preventing stock shortages in European healthcare supply chains

 Drug shortages are recognised as a global issue by the World Health Organisation (WHO) with research indicating that the problem has been increasingly affecting European countries.  The duration of medicine shortages can range from a few days to several months, with acute and chronic medicine shortages potentially compromising patient outcomes.  This, together with the expense and time burden of drug shortages, has led to medicine agencies expressing concerns about the long-term supply of drugs.  To understand how to prevent stock shortages in European healthcare supply chains, we first must define the true extent of the problem.   

There is yet to be a commonly accepted definition of medicine or drug shortages, yet most researchers tend to encompass four situations in their description which can be summarised by De Weerdt and Simeons’ outline:  

  1. Supply is unable to meet demand
  2. Supply is interrupted
  3. The medicine is not able to be delivered
  4. The medicine is unavailable to patients

The effects of such drug shortages are suffered at every point of the supply chain: pharmacists’ time and budgets, clinicians, manufacturers and, most importantly, the wellbeing of patients. 

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In 2016, a report by WHO quoted the response of a large European survey that showed 21% of hospital pharmacists experience a shortage of medicines every day, and a further 45% every week.   Furthermore, one in five pharmacists felt that they could not manage the shortage all or most of the time, indicating that the medicines shortages cause patients to suffer disruption to their treatment. 

Despite the issue being reviewed by several major health organisations, research shows that statistics surrounding the true extent of drug shortages is restricted - with no centralized database collecting information about drug shortages in European countries. 

Instead, within the EU, the majority of drug shortages are dealt with at national level by the national competent authorities; although the European Medicines Agency can be involved in certain situations, for example when a medicine shortage is linked to a safety concern or affects several Member States. 

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The intricate and complex nature of the healthcare industry means that, almost by definition, the causes for stock shortages are vast, complex and hard to isolate – with the leading cause often difficult to distinguish.  A report by The Economist Intelligence Unit identifies the three main categories within which the causes fall within as: 

1. Economic: the current financial climate has led to several price mechanisms restricting the price of medicines in order to address budget constraints.  With high levels of R&D investment, limiting the yield of certain drugs makes the manufacturing of them less sustainable for suppliers.  Initiatives to restrict and control costs, such as tendering and payback polices, add greater risk to manufacturers – further reducing supply against demand

2. Regulatory: in Europe, pharmaceutical legislation and guidelines regulate the entire life-cycle of medicines – from development and approval to market entry and availability to end patients.  During shortages, the regulatory requirements that are in place to safeguard patients can actually delay the mitigation of the situation, with manufacturers requiring approval prior to adapting production methods to meet the increase in demand

3. Manufacturing & supply chain issues: issues in this category are related to the streamlining of production facilities and processes - from short lead times and the corresponding just-in-time inventory strategies, to quality and compliance issues.  With disruptions having a direct impact on end patient supply, the importance of getting every stage of the supply chain right is of paramount importance. 

These various drivers are further complicated by the large number of stakeholders involved within the healthcare supply chain, including national and supranational competent authorities, manufacturers, wholesalers, parallel distributors, pharmacists, clinicians and patients.  Efficient and effective management throughout the supply chain is crucial, and this is further emphasised in research by WHO.    

Yet, the priority must always remain to be the wellbeing of the patients to receive the medicines that they need, when they need them. 

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Topics: Healthcare logistics

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